Noida online Ponzi scheme worth Rs 3700 crore busted

Not that ponzi schemes are not common — Sahara, Saradha and Rose Valley made page one news in leading dailies — but in this one, which lured people to hit Facebook and Twitter “likes” for a certain amount of money could have had much wider impact.

Compared to Saradha, where 1.74 million people lost more than Rs 20,000 crore; or Rose Valley, India’s largest chit-fund scam worth Rs 60,000 crore, or Sahara that duped people for Rs 36,000 crore — the Social Trade scam is just worth Rs 3,726 crore from 600,000 people.

The company, run by a 26-years old engineering graduate, Anubhav Mittal, along with Shridhar Prasad and Mahesh Dayal lured take up members of a certain amount, and then ask them to like Facebook and Twitter links.

Buying social media likes is a common practice in the corporate world. It would not have been a crime if it was just taking money from companies to buy “likes”.

For experts, Social Trade throws up larger challenges. You can reach to large number of people in a very limited time, and online is so sophisticated that you can go untraceable… Online schemes are more dangerous.

But Mittal wanted quick money, and a lot of it.

To enroll, he would ask people to pay up Rs 5,750 (Social Trade offered other tariffs as well), and then a member would have to like pages — for 125 likes every day, he would pay Rs 625, which would be credited to the member’s account.

“This will be your daily income and will be accumulated monthly. If you add more people to the network, you will be moved up in the hierarchy, and you will get some commission on that.”

Ponzi schemes usual peak when fraudsters make most of the prosperous times, by giving outsized returns on small investments. As long as the good times remain, the returns flows in — usually funded by large amounts of membership money. Once the membership money stops coming in the Ponzi schemes go bust.

Between 2008 and 2009, about 160 Ponzi schemes worth $40 billion collapsed, globally.